The present invention relates to systems and methods for electronic trading that provide incentives and linked auctions. More particularly, the present invention relates to systems and methods for electronic trading that provide incentives for gathering orders, making markets, and submitting block orders, and that enable linking of multiple trading auctions.
In recent years, electronic trading systems have gained wide spread acceptance for trading a wide variety of goods, services, and financial instruments. For example, electronic trading systems have been created which facilitate the trading of financial instruments and commodities such as stocks, bonds, currency, futures, oil, gold, pork bellies, etc. As another example, online auctions on the Internet have become popular markets for the exchange of services and both new and used goods. In one embodiment of systems for electronic trading of financial instruments, for example, a first trader may submit a “bid” to buy a particular number of 30 Year U.S. Treasury bonds at a given price. In response to such a bid, a second trader may “hit” the bid in order to indicate a willingness to sell bonds to the first trader at the given price. Alternatively, the second trader may submit an “offer” to sell the particular number of the bonds at the given price, and then the first trader may “take” or “lift” the offer to indicate a willingness to buy bonds from the second trader at the given price.
Advantages to trading electronically include enabling traders to remain anonymous for at least a portion of the trading process, facilitating trading among traders at different physical locations, and improving the accuracy of documenting trading activity. Nevertheless, as with any method for trading, electronic trading needs to be sufficiently efficient to prevent the costs of trading electronically from overshadowing its benefits, and sufficiently liquid in order to truly reflect the market price of items being electronically traded.
One way in which efficiency and liquidity can be improved in any trading system is by increasing the volume of orders in the trading system, increasing the amount of time during which a market is available for orders to be executed, and enabling items to be simultaneously traded independently of each other. Thus, it would be desirable to provide systems and methods which increase the volume of orders in the trading system, increase the amount of time during which a market is available for orders to be executed, and enable items to be simultaneously traded independently of each other.